There, the employer filed a lawsuit to enforce a non-compete obligation that prevented the employee from conducting “conduct similar to that of the employer`s business, directly or indirectly, for five years. The employee then filed an application to dismiss the employer`s action, which the court upheld. In addition to the actions of many state legislatures, attorneys general of many states have also reviewed non-poaching agreements that resemble non-compete obligations. In July 2018, attorneys general in 11 states announced they were investigating several high-profile fast-food chains for their use of poaching bans or non-compete clauses that would have limited the ability of low-wage workers to get better-paying jobs with another franchise. Illinois Attorney General Lisa Madigan said, “Non-poaching deals trap workers in low-wage jobs and limit their ability to access higher-paying positions within the same restaurant chain.” The Illinois Attorney General`s Office noted in a statement that 58 percent of major franchisors do not have poaching provisions in their franchise agreements, while 80 percent of fast food franchisors use the agreements. Worker-friendly anti-competitive reforms have been a priority for many state lawmakers in recent years, along with the introduction of laws providing for sick, security, and family leave, and the passage of laws banning criminal background investigations on application forms for many workers across the country. The new law does not contain any provision that existing non-compete obligations may remain in force and remain in force. Therefore, any existing non-compete obligation in violation of the new laws would be null and void. Does the non-compete obligation harm the public interest? Former employees should expect their former employer to proactively obtain information about their new employment for the duration of their non-compete obligation. It is not uncommon for an employer to learn where their former employees got a new job after leaving the company. The former employer often obtains this information by asking that employee`s former colleagues, doing Google searches, or hiring a private investigator.
Let us not delude ourselves: employers who have taken the trouble and cost of drafting a non-compete obligation are unlikely to neglect the possibility of applying this non-compete agreement to their former employee and, where appropriate, to the new employer of that former employee. Another important precondition for valid non-compete obligations is consideration. Consideration is a legal term that refers to something of value that each party must exchange in order to create a contract. In the case of non-compete obligations, an employee`s consideration is to waive his or her legal right to work wherever he or she wishes. In return, the employer must provide the employee with something valuable to serve in return. If your employer has provided you with a non-competition clause, you should not hesitate to negotiate the scope or duration. In fact, a non-competing lawyer can easily help you in these crucial negotiations. By negotiating the wording of the non-compete obligation before it is enforced, you can minimize the likelihood that you will enter into a full and lengthy non-compete obligation that could harm your future employability. Maryland is one of many states that recognize and enforce non-compete obligations. These are employment contracts in which an employee agrees not to work in the former employer`s line of business in a geographic area and for a certain period of time. In general, a non-competition clause prohibits an employee from working for a competing employer after leaving a company`s employment relationship.
As a general rule, a valid non-compete obligation covers a certain period of time and/or a certain geographical area for the application of the non-compete obligation. There are only two reasons why a Maryland employer can require an employee to sign a non-compete agreement. These two interests are: Determining whether a non-compete obligation is appropriate is a very factual investigation. The Maryland courts have clarified that their assessment of the suitability of a non-compete obligation is guided by “where the limitation is limited to limits that are not broader in area and duration than is reasonably necessary to protect the employer`s business, and do not impose undue hardship on the employee or take into account the interests of the public.” Maryland courts insist that there is no firm and expeditious rule for determining what protection the employer`s business is reasonably necessary, what constitutes undue hardship to the employee, or how scales should be carefully weighed when assessing the public interest. Maryland is not the first state to enact laws restricting the use of non-compete obligations and conflicts of interest in employment contracts. Under Maryland`s NCICA, a conflict of interest or non-competition is not enforceable for employees earning an amount equal to or less than $31,200 per year or $15.00 per hour. The law came into force on 1 October 2019. However, the law does not apply to agreements regarding the inclusion or use of a customer list or other protected customer information. Non-disclosure agreements to protect the exclusive information of the employer`s clients are still enforceable against these low-wage workers.
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